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>>a sensible worksheet for tracing Mortgage Interest?<<

No worksheet but the best explanation I know of for allocating interest is in Chapter 4 of Pub 535 at http://www.irs.gov/pub/irs-pdf/p535.pdf, starting with "TIP: The easiest way to trace disbursements to specific uses is to keep the proceeds of a particular loan separate from any other funds." In my opinion, that's pretty sensible.

[And may I add, I always appreciate the rare occasions when the IRS gets sarcastic!]

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